Wanda Austin-Peters, who lives in Colonie but grew up in North Albany public housing, opened a Subway franchise on Henry Johnson Boulevard partly because she hoped to help revive the Arbor Hill and West Hill neighborhoods and make them more appealing to residents of places like Loudonville. (Lori Van Buren / Times Union) less

Wanda Austin-Peters, who lives in Colonie but grew up in North Albany public housing, opened a Subway franchise on Henry Johnson Boulevard partly because she hoped to help revive the Arbor Hill and West Hill ... more

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Wanda Austin-Peters, who lives in Colonie but grew up in North Albany public housing, opened a Subway franchise on Henry Johnson Boulevard partly because she hoped to help revive the Arbor Hill and West Hill neighborhoods by making them more appealing to residents of places like Loudonville. (Lori Van Buren / Times Union) less

Wanda Austin-Peters, who lives in Colonie but grew up in North Albany public housing, opened a Subway franchise on Henry Johnson Boulevard partly because she hoped to help revive the Arbor Hill and West Hill ... more

It's a choice between north and south. It's a choice between Colonie and Albany. But as any resident of the Capital Region well knows, it's also a choice between different worlds.

The Loudonville side of the highway is largely a landscape of sweeping lawns, old trees and grand houses. Yet Arbor Hill, just a mile distant, is unmistakably urban. The buildings, often dilapidated, sit close to the sidewalk and huddle like sheep in a blizzard.

Both are places where people live and work, dream and die. But rightly or wrongly, fairly or unfairly, each also occupies territory in the regional consciousness — Loudonville synonymous with suburban wealth and plenty, Arbor Hill synonymous with urban poverty and despair.

The neighborhoods would seem to represent extremes of the American experience. But in a nation of growing wealth disparity and income segregation, where the percentage of people living in either affluent and poor neighborhoods is rising, extremes are becoming the norm.

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America, it turns out, looks more and more like Arbor Hill and Loudonville.

In truth, Loudonville and Arbor Hill have exaggerated reputations. There are wealthier communities in the Capital Region than Loudonville, and there are poorer neighborhoods than Arbor Hill. There are middle-income people, of course, on either side of the divide.

But nowhere else in the region is such a large concentration of wealth so close to so much poverty, nowhere are the contrasts quite so sharp.

In the primary Loudonville census tract, for example, the median household income is $105,833 and poverty is virtually non-existent. Twenty-two percent of families have annual income greater than $200,000, according to the Census Bureau.

In Arbor Hill, meanwhile, the median household is just $25,135 — and 46.8 percent of families reported income below the federal poverty line.

The census surveys show ways in which poverty and wealth are linked to a divide in lifestyle.

Here are just three examples:

• In the Loudonville census tract, bordered by New Loudon, Albany Shaker and Osborne roads, nearly 70 percent of residents are married, compared to 15 percent in Arbor Hill.

• Not a single Loudonville family surveyed by the census from 2007 to 2011 reported having a grandparent in the same household as a grandchild. In Arbor Hill, the arrangement was found in nine percent of homes.

• In Loudonville, 90.4 percent people drive to work and another 7.9 percent work at home. In Arbor Hill, 32 percent commute by bus, 18.5 percent walk and hardly anybody works at home.

But race is probably the most conspicuous difference between the neighborhoods.

The differences and distinctions between the nearly adjacent neighborhoods often surprise Capital Region newcomers, but they quickly become just another fact of ordinary life — as routine as the flow of the Hudson River.

"On occasion you think about it, but I'm not sure the distinction is something that most people dwell on," said Lonnie Clar, who has lived in Loudonville for 35 years. "It's not the kind of thing that comes up in ordinary thought and conversation."

To be sure, Loudonville has long been a place distinct from the city to its south. In the 1800s, it was where wealthy Albanians had country retreats, allowing an escape from urban noise and pollution. The community gradually became a more densely populated hamlet, but kept its prestige as a place where the successful congregate.

The history of Arbor Hill, along with the West Hill section of the city west of Henry Johnson Boulevard, is more complex.

For much of its long history, the district was a multiracial stew of wealthy industry leaders, the middle and working classes, and the poor, according to Tony Opalka, the city historian. But the neighborhood, like so many nationally, suffered from white flight in the 1950s and 1960s, leaving it mostly poor and black.

Deep ravines — Tivoli and Sheridan hollows — form the northern and southern boundaries of Arbor Hill. And to this day, Tivoli Hollow remains an important divider between the neighborhood and Loudonville, with Patroon Creek, railroad tracks and a spaghetti tangle of concrete highway and ramps forming a formidable barrier.

"Transportation corridors are walls," said Gene Bunnell, a University at Albany professor of urban planning.

The wall doesn't precisely divide Albany from Loudonville and the town of Colonie, as the city line is actually north of the Interstate. A section of what many people assume is Loudonville is actually in Albany.

Likewise, much of the suburban territory east of Route 9 is actually Menands.

But there's no doubt that the highway and rail tracks help make the stark distinction between Arbor Hill and Loudonville possible. There's almost no residential transition zone — a driver headed south on Route 9 through Loudonville finds that the two-lane road suddenly and surprisingly widens before carrying cars over the expanse of interstate into Arbor Hill.

"The neighborhoods are right next to each other, but there's a huge disconnect," said Amanda Paeglow, 29, who lives in Ten Broeck section of Arbor Hill and is active in the Loudonville Community Church. "People from Loudonville don't know how to get in touch with Arbor Hill, and people from Arbor Hill don't know how to connect with Loudonville."

Such disconnects may be more common as people increasingly live near neighbors with similar income levels.

In a recent report, the Pew Research Center found that the percentage of lower-income households in poor neighborhoods increased from 23 percent to 28 percent over the last 30 years, while the number of affluent households located in high-income areas increased from 9 percent to 18 percent.

(Pew defined an upper-income neighborhood as having median income above $104,000 and used $34,000 as the benchmark for a lower-income area — meaning the definitions include Loudonville and Arbor Hill.)

It's hard to fault families for settling in affluent areas with good schools and low crime. But income segregation matters, said Fry, coauthor of the Pew report, because "the poor tend to have worse outcomes when they live in concentrated poverty."

Fry cited research showing that crime and dropout rates, among other factors, tend to be higher among the poor who live in low-income neighborhoods, when compared to poor people who live in mixed-income neighborhoods.

In short, living amidst poverty makes it harder to escape poverty.

Some from both sides of the Colonie-Albany line are working to alleviate the effects of concentrated poverty — and are bridging the gap between the Arbor Hill and Loudonville.

Paeglow, for example, runs a program that encourages members of the Loudonville Community Church to volunteer at the Arbor Hill Community Center.

Paeglow's history with Arbor Hill is unusual.

When she was 17, her father moved the family from Voorheesville to Arbor Hill as he established a Clinton Avenue medical clinic. Paeglow admits the new surroundings initially frightened her, but now says she wouldn't want to live elsewhere.

"The only way I got over being intimidated by the neighborhood is by becoming a part of the neighborhood," she said. "It's taking out the fear of the unknown."

Wanda Austin-Peters hopes her restaurant, a Subway on Henry Johnson Boulevard, also helps alleviate fears. Austin-Peters, who grew up in North Albany but now lives in Latham, chose the location hoping a familiar franchise might lure outsiders to the neighborhood, and she tells her staff to treat each customer with unusual care.

"I wanted to say, 'Let's see what I can do to change things,'" Austin-Peters said.

Austin-Peters believes much about Arbor Hill and West Hill has improved since her business opened in 2005. There are new businesses and buildings along Henry Johnson Boulevard, and some surrounding streets show restored and revitalized housing.

But hardship remains entrenched.

In Arbor Hill, 52.2 percent of children live in poverty, the census says.

And 54.1 percent of families have annual income below $25,000, while that's true for just 0.9 percent of Loudonville families, the census reports.